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Pursuant to a congressional request, GAO provided information on the Department of Agriculture's (USDA) state office collocation plans, focusing on: (1) what criteria USDA established to guide its collocation decisions; (2) whether USDA consistently applied each of the criteria in making its collocation decisions; (3) how USDA validated the cost data submitted by the three agencies' state offices to support their collocation recommendations and whether they included all relevant costs; and (4) examples of federal agencies that have realized economic benefits in relocating their offices because they asked communities to offer financial benefits as an incentive to relocate in those communities.

GAO noted that: (1) USDA established 10 criteria to be considered in making collocation decisions; (2) these included several criteria directly related to cost considerations, such as the one-time costs and savings resulting from the collocation, as well as other criteria not directly cost-related; (3) other criteria included the availability of transportation and the location of the collocated office central to the agencies' activities and near other USDA, federal, and state government agencies; (4) USDA did not establish guidance on how state and headquarters officials should weigh the relative importance of the 10 criteria in making their collocation decisions; (5) as a result, USDA state agency officials in several states could not reach consensus on where to locate their combined state offices; (6) the extent to which USDA used each of the individual criteria in making collocation decisions or to which it consistently applied each criterion is unclear because USDA did not establish procedures that required state or headquarters officials to document the impact that each criterion had on their decisions; (7) USDA appeared to focus primarily on the one-time cost of the collocation; (8) this cost item includes the estimated cost to relocate employees, the expenses of moving offices, and the estimated savings associated with combined office space; (9) to validate the reasonableness of the cost data submitted by state office officials to support their recommendations, USDA headquarters officials asked state officials to verify that certain cost estimates contained in the collocation plans were current; (10) USDA did not make sure that all relevant costs were included in the cost estimates; (11) the omission of costs and other adjustments that USDA made to the cost estimates tend to overstate the overall savings expected from its collocation efforts; (12) concerning the issue of encouraging communities to offer incentives for relocation, GAO identified one case in which a federal agency realized economic benefits by encouraging such competition; (13) in GAO's 1990 report on facilities location policy, GAO noted that the Bureau of Engraving and Printing was able to generate widespread competition in meeting its space needs and was able to obtain considerable savings for the government; (14) however, USDA did not consider economic incentives in selecting collocation sites; and (15) USDA's position in this regard is based on a concern that considering economic incentives could create competition among communities and would in effect shift the financial burden from the federal government to local community taxpayers.